Toronto Stock Exchange, April 1 – 5

The TSX gave away what it gained for investors so far this year, as the S&P/TSX Composite Index dropped 420 points to close at 12,331.85 for the period.

The sell-off came on the back of worse-than-expected job numbers south of the border, which punched holes in the notion that the U.S. economy is rebounding. Military tensions rising with North Korea also soured investor sentiment.

Concerns about the global economy did little for gold, with the metal down US$23 to US$1,575.90 per oz., while the Global Gold Index shed 19 points to reach 236.19.

Gold bugs won’t want to hear it, but Horizons Exchange-Traded Funds, which gains value when the price of gold falls, was the largest gainer in the sector by dollar value. The ETF was up $2.04 to $15.90 when the French Bank Société Générale released a report predicting the end of the “gold bubble,” with prices falling to US$1,375 per oz. by year-end.

The diversified miners didn’t fare any better, and the S&P/TSX Capped Diversifed Metals & Mining Index was off 16 points to 850.36. The price for copper was off 6¢ to US$3.34 per lb.

Tahoe Resources brought some good news to the market, announcing it has received the final mining licence for its Escobal silver deposit in southeast Guatemala — clearing the way towards production. Construction remains on track and commercial production should come in early 2014. Escobal is expected to generate 20 million equivalent oz. silver a year based on 27 million indicated tonnes grading 422 grams silver per tonne, 0.43 gram gold, 0.71% lead and 1.28% zinc. The company’s shares gained $1 for the period, finishing at $18.81 per share.

Century Iron Mines also bucked the gloom and scratched out a gain, although it used management’s own money. The company’s stock was up 23% to 51¢ after its CEO, chief financial officer and a board director bought 1.5 million shares at 40¢ per share. In March the company released a preliminary economic study on two of its iron ore projects: Joyce Lake and Duncan Lake. Joyce Lake, which is located within the Labrador Iron Trough, is a direct-shipping project with a pre-tax net present value of $94.5 million using an 8% discount rate.

Drill results from Mawson Resources failed to capture investor imagination. Shares were down 30% to 74¢ after the company released results from its winter drill program at the North Rompas, South Rompas and North Rajapalot prospects in Finland. The best intersection returned 0.5 metre grading 148 grams gold and 0.42% uranium oxide from 16.5 metres depth. The company drilled 51 drill holes at Rompas-Rajapalot during its winter campaign.

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